A MAN who was paid one-tenth of a €900,000 High Court award against a newspaper must return the money, the Court of the Appeal ruled.

However, the court put a stay on its order, and on separate orders in relation to legal costs, in the event that Martin McDonagh is successful in asking the Supreme Court to consider an entirely new appeal against the decision overturning the €900,000 award.

Last month, on behalf of the three-judge appeal court, Mr Justice Gerard Hogan described as perverse a High Court jury's 2008 decision to award €900,000 to Mr McDonagh after it found he had been libelled in a Sunday World article entitled "Traveller Drug King".

The story followed the seizure by gardai of IR£500,000 worth of cannabis and amphetamines in August, 1999, in Tubbercurry, Co Sligo.

Mr Justice Hogan said the evidence overwhelmingly pointed to the conclusion that Mr McDonagh, of Cranmore Drive, Sligo, "was, indeed, a drug dealer associated with the drugs seizure in Tubercurry".

Following the award in 2008, the High Court put a stay on its payment out pending appeal - on condition that€90,000 was paid over by the Sunday World.

The money was paid.

In overturning the award, the appeal court also ordered there should be a re-trial of a second allegation of loan-sharking which the jury had also found in Mr McDonagh's favour.

The matter of costs and repayment of the €90,000 came before the Court of Appeal Monday (Nov 16).

Eoin McCullough SC, for Sunday Newspapers Ltd, publishers of the Sunday World, asked for an order that the €90,000 be returned, that his client be awarded all of the appeal court costs, as well as most of the High Court costs because a large part of the libel trial centred on the drug dealing allegation which had been overturned.

Declan Doyle SC, for Mr McDonagh, said while he could not say much about the appeal court costs, he asked that the question of the High Court costs be remitted to the the High Court. The repayment of the €90,000 was a matter to be dealt with when the question of a stay on the appeal court order was being decided, counsel said.

After rising for a few minutes, the three-judge court returned to say it was granting the newspaper the appeal court costs, the repayment order it sought, along with two-thirds of the High Court costs.

Mr Doyle then asked for a stay on those orders on the basis that he would be applying to the Supreme Court for leave to appeal the decision overturning the entire award.

The Supreme Court can only consider further appeals on matters of public importance.

Mr Doyle said there was a bona fide issue here because the appeal court had set aside as perverse the decision of a jury and substituted its own (appeal court's) verdict for that decision.

The court had found Mr McDonagh was a drug dealer in circumstances where he has never been convicted of such a charge and where a jury had found he was not, counsel said.

"We say it is a matter of general public importance that an appeal take place".

Mr Doyle also accepted a suggestion from the court that the stay should also be given pending re-trial on the loan sharking allegation although he said it was difficult to see how that could be dealt with until any decision of the Supreme Court on drug dealing allegation was first dealt with.

Mr McCullough opposed the application for a stay pending the Supreme Court application.

The appeal court, after rising to consider the matter, ruled there should be a stay pending the application to the Supreme Court which will have to be within 28 days.

In the event the Supreme Court grants leave to appeal the matter, the stay will continue, Mr Justice Peter Kelly said on behalf of the Court of Appeal.

If it doesn't, there will only be a stay in relation to the High Court costs, Mr Justice Kelly added.